Flaherty Confirms Budget Will Include Rules to Prevent Misuse of Charities

This article was last updated on April 16, 2022

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Finance Minister Jim Flaherty has openly indicated that the Conservative government is poised to further stiffen charity rules in its upcoming budget in order to prevent illegal money laundering activates carried out by criminals and terrorists. However, several charities are afraid that Ottawa will make the rules extraordinarily strict to asphyxiate its critics.

Mr. Flaherty revealed that Tuesday’s budget encompasses new measures aimed at preventing criminals’ practice of exploiting Canadian charities. While rejecting claims that the government is targeting its political opponents, he explained that “if the critics of the government are terrorist organizations and organized crime, I don’t care.” Previously, The Canada Revenue Agency has warned Canadian charities, especially those operating in other parts of the world where cash transactions are common, that they could become vulnerable to exploitation. In a statement issued by Mr. Flaherty, it was elucidated that “there are some terrorist organizations, there are some organized crime organizations, that launder money through charities and that make donations to charities and that’s not the purpose of charitable donations in Canada.” He added that “we are being increasingly strict on the subject. You’ll see some more on Tuesday.”

Whereas, on the other hand, several Canadian charities are worried that Mr. Flaherty and the Conservatives have previously pondered over further changing the rules on political activity and same could happen to charitable donations. Back in 2012, Mr. Flaherty’s budget imposed new sanctions related to enforcing rules make it illegal to spend more than 10 per cent of charity’s resources on political activity.